(CBS/CNN) — Brooks Brothers, the 200-year-old menswear retailer that has dressed 40 US presidents and unofficially became the outfitter of Wall Street bankers, has filed for bankruptcy.
The privately held company had been struggling as business attire grew more casual in recent years. But it has been decimated by the coronavirus pandemic, which sent demand for suits plummeting. Many working-from-home employees opted for far more relaxed looks of t-shirts and sweatpants rather than pinstripe suits and custom shirts.
Brooks Brothers filed for Chapter 11 early Wednesday in a Delaware court. It had warned in June it would lay off nearly 700 workers in three states and is seeking a buyer because coronavirus destroyed its business.
The company has been evaluating various strategic options, including a potential sale. But it has struggled to find a buyer.
The retailer is reportedly in the process of shuttering 20% of its 250 US stores. According to the bankruptcy filing, Brooks Brothers has secured $75 million in financing to continue operating.
Brooks Brothers opened its first store in 1818 near Wall Street. Years later, it began making ready-made suits for men that couldn’t wait for a tailor. In 1896, the retailer invented the original button-down polo shirt and has offered many other first of its kind clothing, including the madras prints and the chunky shetland sweater.
Claudio Del Vecchio, Brooks Brothers’ owner, bought the brand in 2001 from Marks and Spencer for $225 million. He helped expand the brand’s appeal beyond men, including women’s clothing, kids and home items. He told the New York Times last month that its American factories “never made money” and planned to move some operations overseas to preserve cash.
Brooks Brothers is the latest iconic retailer to go bankrupt. J.Crew, Neiman Marcus, JCPenney have all filed in recent months, partly citing slumping sales from the virus.
The pandemic hit Brooks Brothers especially hard because some workers were forced to work from home, eliminating the need for new suits and dressier clothes.
GlobalData Retail said in a note Wednesday that year-over-year sales of men’s formal clothing fell by 74% between April and June.
“While this deterioration will ease over time, demand will remain suppressed for the rest of 2020 and well into 2021 as office working, business meetings, and socializing are all reduced,” wrote Neil Saunders, the managing director of GlobalData Retail. “This leaves Brooks Brothers very exposed to a depressed market.”
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. CNN’s Jordan Valinsky contributed to this report.)